Entire Section

  • PIB 6.11 PIB 6.11 Operational Risk Capital Requirement

    • PIB 6.11.1

      This section applies to an Authorised Firm in Category 1, 2, 3A or 5.

      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 6.11.2

      (1) An Authorised Firm must, subject to (2), use the Basic Indicator Approach as prescribed in PIB App6 to calculate its Operational Risk Capital Requirement.
      (2) An Authorised Firm may, with the written approval of the DFSA, use the Standardised Approach or the Alternative Standardised Approach, both as prescribed in PIB App6, to calculate its Operational Risk Capital Requirement if the DFSA is satisfied that:
      (a) its Governing Body and senior management, as appropriate, are actively involved in the oversight of its Operational Risk framework;
      (b) it has, in accordance with the requirements set out in this chapter, implemented and maintains an Operational Risk policy which provides for a sound and well-defined risk management framework to address the Authorised Firm's Operational Risk; and
      (c) it has dedicated sufficient resources in the use of the relevant approach in its major business lines and its control and audit functions.
      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 6.11.3

      An Authorised Firm seeking to apply the Standardised Approach or the Alternative Standardised Approach must develop specific policies and have documented criteria for mapping gross income for current business lines and activities into the Standardised Approach or the Alternative Standardised Approach, as prescribed in PIB App6. The criteria must be reviewed and adjusted for new or changing business activities as appropriate.

      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 6.11.4

      Once an Authorised Firm has written approval to apply the Standardised Approach or Alternative Standardised Approach, it must not revert to the Basic Indicator Approach without DFSA approval.

      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]

    • PIB 6.11.5

      (1) The DFSA may at any time by written notice require an Authorised Firm to adopt a specified approach to calculating its Operational Risk Capital Requirement where the DFSA considers that this is:
      (a) appropriate given the nature, size, complexity and risk profile of the Authorised Firm's business; or
      (b) necessary in the prevailing economic circumstances and it is in the interests of the DIFC.
      (2) An Authorised Firm must comply with a requirement made under (1).
      Derived from RM111/2012 (Made 15th October 2012). [VER20/12-12]